A non-standard type of dividend that involves the distribution of promissory notes that entail some type of payment at a future date. In other words, the dividend payment is usually made in the form of additional shares, rather than in cash. For example, a company may issue a scrip dividend of 0.10 shares for each share outstanding. Such distribution is typically a sign that a company is short of cash.
Scrip dividend is also known as stock dividend.
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